Mr. Ingram Gillmore reports

GEAR ENERGY ANNOUNCES $85-MILLION ASSET ACQUISITION AND INCREASED 2014 CAPITAL BUDGET

Gear Energy Ltd. has entered into an agreement to acquire heavy oil assets focused near the company's core producing areas of Wildmere, Alta., and Maidstone, Sask. The assets include over 2,000 barrels of oil equivalent per day of high-working-interest, operated heavy-gravity crude oil production (98 per cent oil). The purchase price for the assets is $85-million, payable in cash. The effective date of the acquisition is March 1, 2014, and the closing of the acquisition is expected to occur on or about May 1, 2014.

The assets fit Gear's strategy of targeting underexploited, geographically focused production with low-risk-development locations and simple solutions to increase production value by lowering operating costs. The assets all produce from heavy oil reservoirs analogous to those that the Gear team has been developing in the area for the past four years.

Gear estimates total corporate production at closing of over 7,000 barrels of oil equivalent per day. The acquisition provides a material increase in low-risk future drilling opportunities, and Gear's team has already identified 175 net drilling locations on the assets. This will increase Gear's drilling inventory to approximately 400 locations. Gear has also identified approximately 60 net recompletion opportunities on existing vertical wells. Based on current 2014 drilling pace, Gear's drilling inventory will now be greater than five years.

              ACQUISITION METRICS

Price               $85-million                                        
Production          2,000 boe/d, 98 per cent heavy oil      
Ownership           91-per-cent working interest and 95 per cent operated
Land                Over 40,000 net acres of land                      
Inventory           175 drilling locations, 60 recompletions

Gear intends to finance the acquisition with existing lines of credit and existing cash flow. After the acquisition closes, the company is estimating that Gear will have a relatively low net debt to cash flow ratio of less than one times projected 12-month cash flow.

In conjunction with the acquisition, Gear is pleased to announce that the board of directors has approved an increase in the 2014 development capital budget from $70-million to $85-million. The incremental development capital will be directed primarily toward the acquired assets. The company expects to drill an incremental seven horizontal wells and seven vertical wells on the acquired assets, along with 20 recompletions and multiple infrastructure projects that will result in lower operating costs.

We seek Safe Harbor.